PSBs Lag on Governance as Key Board Positions Lie Vacant for Years: RTI

The Public Sector Banks (PSBs) in India continue to struggle with corporate governance as several key positions on their boards remain unfilled for years, according to information disclosed under the Right to Information (RTI) Act; The Hindu Business Line Reported.

Responses revealed that leading PSBs such as Union Bank of India and Central Bank of India currently do not have a Managing Director & CEO in place, undermining both strategic leadership and regulatory compliance.

At Bank of Baroda, six of the 16 board positions are vacant, including those of Chairman and Chartered Accountant (CA) Director. Central Bank of India has eight directors on its board but is functioning without a Chairman, MD & CEO, and five other directors. Similarly, Union Bank of India lacks a permanent MD & CEO. Indian Bank and Punjab & Sind Bank are also operating without a Chairman and CA Director.

Governance Concerns
Experts argue that such prolonged vacancies highlight systemic governance lapses in PSBs.

“PSBs and other public sector entities often cite lack or delay of approval from their respective ministries for director appointments. But the tenure and responsibilities of directors are well known, and appointments can be planned in advance,” said Shriram Subramanian, MD of InGovern Research. “Unfortunately, PSBs engage in delay tactics. The PMO must ensure such practices are disallowed and penalties imposed on errant entities. As former SEBI chief Ajay Tyagi pointed out, most PSBs and PSUs fail to meet corporate governance norms — which is a shame.”

The issue is not recent. According to Devidas Tuljapurkar, Joint Secretary of AIBEA, nearly half of board-level positions in PSBs have been vacant for a decade. “Positions earmarked for Chartered Accountants — who are supposed to play a crucial role on audit committees — are also lying vacant. While SEBI guidelines have ensured mandatory shareholder directors, most appointees are retired MDs or EDs of LIC and PSBs. Meanwhile, positions meant for workmen and non-workmen representatives have remained unfilled for almost ten years,” he said.

A Decade of Neglect
The data points to a deeper malaise. Despite repeated emphasis by regulators on strengthening governance frameworks, PSBs continue to suffer from leadership gaps that hinder accountability, transparency, and long-term planning.

Industry watchers believe the persistent vacancies reflect both bureaucratic inertia and political control over appointments in state-owned banks. At a time when private sector banks face stricter compliance norms and faster leadership transitions, PSBs remain weighed down by delays and lack of urgency.

The Way Forward
Experts stress that board appointments in PSBs should be depoliticised and streamlined with clear timelines. Delays not only weaken governance but also erode stakeholder confidence and decision-making at the top.

Until the government enforces accountability and ensures timely appointments, India’s largest lenders risk falling further behind in global corporate governance benchmarks.